In order to preserve homeostasis and normal gas exchange function, the lung must restrain inflammatory responses to the continual assault posed by infections, antigens, and toxins. Host responses in the distal lung are dictated in large part by the cross-talk between alveolar epithelial cells (AECs), which comprise the alveolar surface, and alveolar macrophages (AMs), its resident immune cells. Little is known about mechanisms by which AMs control inflammatory responses of AECs. We have recently identified a novel form of intercellular communication in which AMs secrete suppressors of cytokine signaling (SOCS) 1 and 3 proteins within membrane-delimited vesicles that can be taken up by AECs to inhibit inflammatory signaling in response to cytokines in vitro and in vivo. AM secretion of SOCS can be tuned by certain bioactive molecules, including those elaborated by AECs. Furthermore, cigarette smoking reduces while adenoviral infection increases SOCS levels in lung lavage fluid, indicating that dysregulation of SOCS secretion is associated with the known alterations in inflammatory responses that characterize these conditions. This proposal seeks to better understand the fundamental mechanisms, biological consequences, and therapeutic ramifications of this novel form of AM-AEC cross-talk. Aim 1 will characterize mechanisms regulating the release of two distinct types of vesicles - microparticles and exosomes - and the secretion of SOCS proteins within them, in response to bioactive molecules as well as AEC-derived factors. Aim 2 will determine the mechanisms controlling uptake of these distinct SOCS-containing vesicles in AECs and the effects of transcellular SOCS delivery on cytokine signaling, inflammatory gene expression, proliferation, and apoptosis in the target cells. Aim 3 will characterize the operative mechanisms for and consequences of dysregulated SOCS secretion in mouse models of acute inflammation induced by cigarette smoking and adenoviral infection. In addition, the effects and therapeutic potential of synthetic liposomal vesicles loaded with recombinant SOCS proteins will be tested in vitro and in vivo. These studies will provide new insights into the regulation of lung inflammation and a foundation for a novel therapeutic approach to its control.